On 14 December 2012, the Australian Government released an
exposure draft Bill, the Corporations Legislation Amendment
(Remuneration Disclosures and Other Measures) Bill 2012 (Bill),
which proposes amendments to the Corporations Act 2001
(Cth) (Corporations Act). The proposed amendments impose additional
obligations on listed companies' disclosure requirements around
executive remuneration. The proposed obligations extend to
executive salaries, bonuses, termination payments as well as
payments relating to the settlement of any disputes arising out of
the termination of employment.
If the Bill were to be enacted and form part of the Corporations
Act, listed companies will face an increase in their existing
obligations in the following ways:
The requirement that companies whose financial statements have
been materially misstated to either disclose any overpaid
remuneration to Key Management Personnel (KMP) will be 'clawed
back'; or if no reduction, repayment or alteration of overpaid
remuneration is made, an explanation of why not will be required.
This builds on the current disclosure obligations in a
director's report in relation to KMP remuneration.
It will be a requirement to provide a general description of a
company's remuneration governance framework, which is not an
There will be an obligation to disclose the number of lapsed
options and the year in which lapsed options were granted, rather
than just the value of lapsed options (as is the current
There will be an obligation to disclose termination or
'golden handshake' payments, rather than just payments made
pursuant to a contract.
There will be an obligation to disclose present pay, future pay
and past pay for each KMP. This expands on the current
'prescribed details' in relation to the remuneration of
The Bill is the second tranche of reforms since 2010, designed
to build on the additional powers shareholders have over the pay of
company directors and executives.
As this is an exposure draft Bill, interested persons are able
to make submissions on the proposed amendments. Submissions close
on 15 March 2012 and can be made via the
DLA Piper can provide a copy of the current Corporations Act,
supplemented with the proposed changes set out in the exposure
draft upon request.
This publication is intended as a general overview and
discussion of the subjects dealt with. It is not intended to be,
and should not used as, a substitute for taking legal advice in any
specific situation. DLA Piper Australia will accept no
responsibility for any actions taken or not taken on the basis of
DLA Piper Australia is part of DLA Piper, a global law firm,
operating through various separate and distinct legal entities. For
further information, please refer to www.dlapiper.com
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